Martha Carr Skype Book Clubs - Learn More

Economy

Bank of America Building in NYC (Photo by DVPFagan)

America is starting to see some recurring signs of a recovery, including a recent increase at last in the number of new jobs. It was still marginal and across less than half of the country but it’s a start and in the right direction.

A basic principle of economics is that momentum of any kind will continue in the same direction without some kind of intervention. In other words, the rock is no longer rolling over us.

However, the tangled mess of mortgages that crashed the country into the Great Recession still has a few good punches to the gut left before we can put it all behind us. The hairy part is that the problems that are left are still big enough to trip up the recovery and drag out the recovery further or perhaps even send us into a double-dip recession.

Officially, in case you missed it, the Great Recession was over in June of 2009. Now, we’re in the midst of the Great Recovery, which means we’ve hit bottom and are looking toward the rebuilding instead of trying to prevent further deterioration.

But the U.S. economy is still causing a few late night meetings at the White House to get us off the critical list because we’re still in a financial ICU and it’s partially because of what got us here in the first place, mortgages. The other big sticking point is not our deficit as much as other country’s crashing economies that we are tangled with in so many ways but that’s another story for another day. Mortgages are enough to cause plenty of sleepless nights among regulators and politicians all on their own.

Investors who purchased mortgage-backed securities from banks have become fed up with getting nothing for their money and are suing the banks. Bank of America has several lawsuits filed against it for at least 54 billion dollars. Originally, they had pegged the amount at 375 billion last year but after a court ruling had to scale back the numbers.

While the different lawsuits in several states are varied about the exact offenses by BOFA, there is one underlying problem that everyone agrees has aggravated the problem. Sloppy record keeping has led to confusion about who exactly has owned or still owns the mortgages. BOFA is not the only major US bank being accused of the problem. CitiGroup, Wells Fargo, PNC Financial and JP Morgan Chase are some of the others who have recently had lawsuits filed against them citing the same types of problems. [click to continue…]

{ 0 comments }

U.S. Capitol keeping late hours

This weekend’s news cycle was either an indication that we have become over the top self-absorbed or more accurately, a really good indicator of how much trouble the U.S. economy will be in if we falter and default on our obligations, even if it only lasts for a few days.

It’s an amazing moment in journalism when a terrorist bomb and a mass slaying of children in Norway can get trumped on U.S. news channels by brief announcements that U.S. debt talks have broken down, yet again between House Republicans led by John Boehner and President Obama.

The social mediums of Twitter, Facebook and now Google+ were faster at reporting and sharing the details of the Norway news, which may be an indicator that even TV journalism is becoming outmoded but that’s a different discussion.

Major news outlets were leading with the sound bites that nothing had been resolved and the debt ceiling was still closing in as August 2nd approaches. The White House even called an unusual Saturday morning meeting to get everyone back at the table and they came but that too ended in recriminations from both sides and no progress.

Another indicator of just how deep our troubles are that cuts in Social Security, the hallowed third rail of politics, is on the table and neither side is balking at all.

The reason the approaching debt deadline is getting so much attention is because the potential consequences will make the Great Recession look like an ice cube in comparison to the collision with this new financial iceberg.

U.S. Treasury bonds account for two-thirds of the $14 trillion debt, which is currently the largest in the world and the rest is considered Government Account securities or debts owed by the government to itself, such as Social Security payments. Treasury bonds are owned by mostly foreign investors with the biggest debt-holder being China who let us run up such a huge tab so we’d keep buying their exports. [click to continue…]

{ 0 comments }

We are a unique band of people who all came here at some point because we believed in something better. That's still true. (Photo by Cayusa)

The June unemployment figures have been released and the numbers have risen to 9.2 percent with 18,000 new jobs created, well under what experts had predicted. While many pundits will try and predict what that all means none of them know for sure but they hope to come down on the correct side and score a fat book deal. That way, they avoid their own personal recession.

Here are a few possibilities though of what could happen, the good and the bad.

It’s possible that the economic ditch we drove into headfirst is so deep that the usual incentives to businesses to create new jobs that have been used for the past 50 years just aren’t going to cut it this time.

The advent of the Internet age coupled with a global market may just mean that a lot of old industries are never coming back to pre-2008 numbers.

It’s also possible that all of the manly breast-beating that’s going on in Washington by both sides will further extend our financial pain. The inability to find a compromise may mean we default on our debt as a country and that has some very real consequences that could turn out to be worse than the mortgage crisis.

We may look back at that as simple and naïve if Obama, Boehner and the lot don’t stop insisting on being quite so right at our expense.

Feel free to shake your fist at all of it but keep it to just a minute or two because there are still things to do in America. Don’t give up quite so easily, it’s not in our nature.

Here’s where we’re going to take a few old school lessons and combine it with a new idea that’s peculiarly unique to our times. The old lesson is that we’re going to have to downsize our egos and accept that we may not ever sit in a corner office or eat lunch out of anything but a brown bag.

However, if we can appreciate what we do have and more importantly, who we still have in our lives then maybe we can get over the self pity and recognize that we can pay some bills just not like a rock star. That’s how we got here in the first place. [click to continue…]

{ 2 comments }